The top performing markets YTD are the Shenzen and Shanghai composites up 27.4% and 20.2%. China’s markets are performing despite punishing 25% tariffs on 2/3 of all Chinese imports to the US from 10% to 25%. This caused retaliatory measures by the Chinese and they applied tariffs to $60 billion worth of US goods. Trade war this is called… and there are no winners in a trade war. The US feels the balance of trade is way out of whack and President Trump is trying to strategically place tariffs on Chinese imports to bring President Xi to the negotiation table to set hard lines on intellectual property theft and other trade abuses committed by the Chinese.

It remains to be seen if a Trade Deal will be struck in 2019, but it is apparent that both economies are beginning to feel the burden of increase tariffs on products as economic activity slows and shifts to strategic locations such as Vietnam to avoid said tariffs.

Positive 2019 world wide returns are more the result of horrible market performance in December 2018. December 2018 was one of the worst months in the world financial markets since the 1929 market crash… The S&P 500 was down 14.5% on from the period of 12/1/2018 to 12/24/2018, which put the index in correction territory.

Brazil is the one outlier, as they had a Presidential election in 2019 that saw a right leaning Jair Bolsonaro attain the highest office. Brazil has been overcoming the Odebrecht scandal and government corruption that saw a former president Michel Temer indicted on bribery and corruption charges in March. Increasing political stability in Brazil has allowed the Ibovespa to rise 42% over the last year and remain one of the top performing markets in the entire world.

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